Historical Tax & Income Data: Some Charts

With severalofmyco-bloggers raising the issue of how income & federal tax liabilities are distributed among different income levels, I figured I’d reacquaint myself with Microsoft Excel, and gin up some semi-relevant charts. Fortunately, the Congressional Budget Office already did the heavy-lifting back in December ’08; responding to a query from Sen. Baucus, they drafted a letter[1] providing historical data for various income categories, with particular attention to higher-income ones. Chart 1 plots the total federal tax liability for each of several income categories, as a % of household income. Charts 2 & 3 plot the proportion of federal taxes paid by said categories; while Charts 4 & 5 plot the proportion of income earned by each category.

[The last link above is to an Excel spreadsheet containing the raw data I used for these charts. Just in case anyone wants to check my sums (probably a good idea), or gin up some other charts using different income categories (YMMV).]

[2] Data for this chart comes from Table 1 of Historical Tax Rates, under the heading “Total Effective Federal Tax Rate”. For “Percentiles 81-99”, I calculated – as weighted averages – pre-tax and after-tax incomes for each year, using data from Table 3 regarding numbers of households and average household income for each of “Percentiles 81-90”, “Percentiles 91-95”, & “Percentiles 96-99”. I did the same for “Top 1%”, using data for “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”.

[5] As with “Top 1%” in Chart 1, I calculated the “Total Effective Federal Tax Rate” for each year by calculating – as weighted averages – pre-tax and after-tax incomes for each year, using data from Table 3 of Historical Tax Rates regarding numbers of households and average household income for each of Percentiles 91-95″, “Percentiles 96-99”, “Percentiles 99.0 – 99.5”, “Percentiles 99.5 – 99.9”, “Percentiles 99.9 – 99.99”, & “Top 0.01 Percentile”. I summed the relevant percentages for these categories from Tables 2 & 3 to calculate “Share of Pretax Income” and “Share of Federal Tax Liabilities”, respectively.